Monday, October 12, 2009

EB-5: It's About Job Creation, Stupid

Our immigration seminar in Venezuela went off without a hitch and we met some great folks. Despite Venezuela’s political complications, it was interesting to see that whatever one’s leanings, the same pragmatism seems to permeate the private sector of what is still a thriving petro-dollar economy.

I’ll admit it:I was a little concerned about the reception we’d get. It turned out to be quite the welcome mat, and not only from those who are unhappy with the current climate…but also from those who support Venezuela’s new agenda as defined by its current leadership. We were met with intelligent questions by a sharp group of prospective U.S. investors from both sides of the political fence who view the U.S. EB-5 Regional Center program for what it is: an intelligent investment-based immigration option which works by creating jobs in the now-floundering greatest economy on earth.

An editorial posted by the Wall Street Journal yesterday was talking about why job tax credits are a bad idea but might as well been discussing the EB-5 program:

“Alarmed by the rising jobless rate, Democrats are scrambling to "do something" to create jobs. You may have thought that was supposed to be the point of February's $780 billion stimulus plan, and indeed it was…. The current [jobless] rate is 9.8% and is expected to rise or stay high well into the election year of 2010. Rarely in politics do we get such a clear and rapid illustration of a policy failure…

This explains why political panic is beginning to set in, and various panicky ideas to create more jobs are suddenly in play...

Alas, their new ideas are little more than political gimmicks that aren't likely to result in many new jobs…”

Gimmicks indeed.Among the ironies:

-the EB-5 program was just extended for three years last week with bipartisan support, and that legislation creates American jobs which are neither funded by existing U.S. enterprises NOR simply more minimum wage jobs (but, rather, a representative cross section of across-the-board openings, both skilled and less skilled);

-the Democrats, historically unfocused on business/investment immigration due to their relationship with labor, now find themselves in the White House and with a Congressional majority…and seemingly still unable to grasp the staggering job-creation potential via the now-assured continuity of the EB-5 investment visa program.

-the combination of insanely high filing and concocted “related” fees charged to employers of H-1B visa professionals has triggered a dramatic drop in the use of the category, with U.S. employers instead outsourcing these tech jobs overseas…not protecting a single America job but instead accelerating the decline of existing U.S. jobs via the resulting decimation of collateral support positions reliant upon healthy H-1B visa utilization.

It is all so dumb.Last quote from that same article in the WSJ:

The lack of U.S. job creation is a big problem, but the quickest way Washington could help would be to stop imposing more financial burdens on hiring.

Did anyone seriously believe that by making H-1B employer fees obscenely high U.S. jobs would be created? Did Congress honestly imagine that U.S. technology companies would be able to continue to do business in the U.S. without the core numbers of foreign tech professionals...and not outsource?? Finally: was there a single person in Washington who believed that the H-1B process -- already a nightmare of bureacracy even before the imposition of todays outlandish filing fees -- was something any U.S. employer would willingly step into but fora bona fide need for skilled foreign workers?

Thinking about all this over the weekend in Caracas, it is incomprehensable that the world’s largest economy can fail to see the obvious while our prospective investor clients in Venezuela - even those who aren't great fans of our politics -- see the naked truth:Current unemployment figures in the U.S., bargain real estate prices, dramatic increases in infrastructural spending by USG and a green card for the investor combine to make one of those exceedingly rare “win-win” situations.

It’s about the jobs, Stupid.

Email me if you want to know more about what we at Bernstein Osberg-Braun & de Moraes are doing to make the EB-5 opportunity a reality for qualified foreign investors.